Tariffs a ‘wet blanket’ on US construction manufacturing growth

US tariffs have effectively created a “wet blanket” over efforts to boost US manufacturing in the construction and agricultural equipment sectors, said the Association of Equipment Manufacturers (AEM) on the eve of the ConExpo-Con/Agg show in Las Vegas.

Kip Eidenberg, senior vice president, Government & Industry Relations, at AEM, speaking at a press briefing at the show, said there was evidence of some investment in support of certain sectors, such as data centres, but said; “the tariffs are essentially a wet blanket that is weighing down capital investments, expansion of manufacturing capacity and, and growth overall.”

He said there had been some policy wins for the US manufacturing sector, such as incentives in the One Big Beautiful Bill that have created a buffer against the impact of tariffs; “The tariffs are not by and large bringing around the manufacturing renaissance in the United States with more manufacturing capacity and supply chains coming back to the US. So, if that was the goal of the tariffs, we have not seen that.”

From left, Kip Eidenberg (senior vice president, Government & Industry Relations at the Association of Equipment Manufacturers (AEM)), Brian Bieller (president, Bomag America and chairperson, AEM government and political affairs Committee), and Megan Tanel (president and CEO of AEM). (Image: KHL Group)

He said tariffs made it more expensive to manufacture equipment in the US and makes US-made equipment less competitive; “both in the US market...and certainly less competitive in global markets, and none of this obviously is creating that massive investment in domestic manufacturing capacity that the administration would like to see and that we would all like to see.”

Eidenberg was speaking at a briefing to launch AEM’s latest three-year assessment of the economic impact of equipment manufacturing in the US. The report, created with S&P Global Market Intelligence, revealed that between 2023 and 2025 there had been a 0.2% decline to 421,000 in the number of people directly employed in the construction and agricultural equipment industries, while the total number of employees supported by the industry has fallen by 0.4% to 2.2 million jobs.

Impact on exports/imports

AEM said tariffs have had a significant impact on both US exports and imports. Total imports to the US declined by 17.7% in 2025, while exports from the US were down 9.7%. South Korea, Germany and the UK all saw a greater-than 25% decline in exports to the US, while US exports last year to Germany were 16.8% lower, and to Canada were 13.2% down.

Brian Bieller, president of Bomag America and chairperson of AEM’s government and political affairs committee, said there was cause for optimism, with investment in chip manufacturing and data centres helping to boost US construction spending; “Further, the One Big beautiful Bill Act is expected to accelerate project schedules due to new tax credits and 100% bonus depreciation for construction equipment.”

He said the US needed enforceable, bilateral multilateral trade agreements “in order to continue to do what we do best, which is to invest in our communities for our businesses, and driving the American economy forward. We’d like to see relief from tariffs, especially for those parts and components that cannot be sourced domestically...and obviously expand the tax credits for export.”

Kip Eidenberg said investment in infrastructure would play a key role going forward; “So much of the equipment that the industry makes is made in rural communities that are not close to any major ports or intermodal terminals or challenging to get parts and components there and then get finished products out. So investment infrastructure is just as important for our ability to continue to manufacture in the United States as it is for us to sell equipment to customers around the world.”

He said US Congress backing for the next five-year Highways Bill, which could mean $1 trillion in investment, was important; “obviously we are going to be pushing hard for the speedy reauthorisation of surface transportation programs, the certainty that comes with a Highway Bill, the five-year funding cycle that that brings is absolutely critical.”

He added that if anyone could convince Congress to pass the Highways Bill, it was the current US president; “So I think were probably as optimistic as you can ever be about a highway bill getting through, particularly in an election year. So we feel pretty good about it.”

‘Substantial contribution’ to economy

Megan Tanel, president and CEO of AEM, said the industry “makes a substantial contribution to the American economy. The equipment manufacturers added $415 billion to the gross domestic product of the United States in 2025. This represented 1.4% of 2025 total nominal GDP in the US.”

Tanel also revealed that the average annual income per job in construction and agricultural equipment manufacturing reached six figures in 2025; “The average US labour income per job amounted to $105,000 or approximately 50% above the national average. This reflects the highly skilled nature of our workforce.”

She said ConExpo would throw a spotlight on the importance of the manufacturing sector in the US; “This is our chance. We can highlight the amazing future that this industry has. We are a longstanding industry, we’re not going anywhere and we’re only going to get better.

“There’s great paying jobs out there, and there are great people that work in this industry, and you will find them throughout every aisle and hallway out there in every lot and, and every building.

“So we’re looking forward to really showcasing what this industry is about, the resilience the, the success and the excitement.”